Optimise your ESG assessment scoring to impress investors

It’s investor ESG assessment season. We support many of our clients to maximise their ESG assessment scores. While each assessment differs slightly, there are five key actions you can take to boost your rating.

1. Get your policies documented

First, check what you have in place against our Policy Checklist. Draft new policies as needed. Alternatively, create a standalone ‘Summary of ESG Policies’ document. This will summarise your existing policies and help close any gaps.

2. Measure your water and waste

If you’re an office-based services company, your water and waste impact may be small. However, investors still want these metrics measured. The good news is that this should be straightforward. You can extract water consumption directly from your water bills.

For waste, identify your regular waste collection details, such as bin size, type (general or recyclable), and collection frequency. Apply typical waste tonnages for your bin size. We use Veolia’s information to provide a good annual estimate. If your waste provider can give you the tonnage from their bills, use that for more accuracy.

3. Measure your greenhouse gas (GHG) emissions

Most investors now expect portfolio companies to measure scope 1, 2, and 3 GHG emissions. If you haven’t measured these yet, it may be challenging to do so quickly. However, measuring just scope 1 and 2 emissions is much more achievable. Investors will view this favourably, as these are your most direct emissions.

Scope 1 and 2 emissions come from your utility use and business travel in company-owned or leased vehicles. Ensure you measure these emissions using both location-based and market-based methods. If you need assistance, contact us.

4. Be prepared with your people data

Investors typically ask about the size of your business in terms of personnel. However, the exact metrics can vary. Some may request full-time equivalent (FTE) data, while others prefer headcount. Some might want year-end data, while others look for the monthly average over the year.

Be ready to provide these different options. If possible, gather data on employee turnover as well.

5. Understand your gender diversity profile

Gather statistics on gender diversity across all employees, the board, and, if time allows, at the senior management level. Investors often request this information, but definitions of senior management can vary.

Result: Optimised ESG assessment scoring

Taking these five steps will position you well for a solid score in any investor ESG assessment. If you want support with any of the above or tailored help for a specific investor assessment, get in touch.

Authored by Caroline Johnstone (the person, not AI).